What is Lighting Network? What is it used for?
Updated on
Thu, 7 Sep, 2023 at 5:48 PM
The Lightning Network is designed to make bitcoin transactions as fast and cheap as possible. It’s part of a newer class of crypto technologies known as “layer 2” blockchains. By offloading some transaction “traffic” to the Lightning Network’s “layer 2” blockchain, the core Bitcoin blockchain (“layer 1”) can move faster.
Lightning Network. Advantages.
- Instant Payments: Bitcoin aggregates transactions into blocks spaced ten minutes apart.
Payments are widely regarded as
secure on Bitcoin after confirmation
of six blocks, or about one hour. On
the Lightning Network, payments
don't need block confirmations, and
are instant and automatic. Lightning
can be used at retail point-of-sale
terminals, for device-to-device
transactions, or anywhere instant
payments are required.
- Micropayments: New markets can be opened with the possibility of micropayments.
Lightning enables one to send funds
down to 0.00000001 bitcoin (< 0.01
cents) without custodial risk. The
Bitcoin blockchain currently
enforces a minimum output size
many hundreds of times higher, and
a fixed per-transaction fee that
makes micropayments impractical.
Lightning allows minimal payments
denominated in bitcoin, using actual
bitcoin transactions.
- Privacy: The Lightning Network offers users a high degree of confidentiality.
Users do not need to make their
channels known to the broader
network. End users can open
private channels to a Forging Block
Lightning Node, which provides
deep liquidity, and no need to
connect a single channel to the
rest of the network.
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